Permits for new small, medium enterprises free: minister

Solo, Central Java (ANTARA News) — The government is providing free services to those who wish to procure permits for new small and medium enterprises.

“The permit letter is required to be written on a piece of paper only. It will be processed by state-owned Bank Rakyat Indonesia,” Minister of Cooperatives and Small and Medium Enterprises (SMEs) Anak Agung Gede Ngurah Puspayoga said during a meeting with SMEs in Solo on Saturday. The minister observed that many SMEs in Indonesia still find it difficult to obtain business permits, which are important requirements to get loans from a bank.

Earlier, the World Bank had pointed out that the Indonesian government needs to strengthen the countrys SMEs ahead of the commencement of the ASEAN Economic Community (AEC).

AEC, to be marked with free regional trade toward the forming of a single economic community in this region, is set to begin by the end of 2015.

“Immediate strengthening, especially in the small and medium enterprises sector, is needed. Efforts towards this end could be started by giving them access to markets, in addition to capital assistance,” World Bank economist Ahya Ihsan suggested.

Ihsan further noted that currently, the biggest challenges that Indonesia will face ahead of the implementation of the AEC are domestic problems, including the preparedness of business players, gaps in infrastructure and skills, and the need for regulatory reforms to reduce corporate costs.

The government could take on a proactive role by helping companies prepare themselves, as practiced by Singapore and Malaysia, he stated.

The governments of the two countries help their SMEs promote their products in international markets.

“SMEs involvement and presence in international markets should have started by now,” Ihsan added.

By being part of the AEC in 2015, Indonesia will have an advantage of greater market access, and will have higher quality goods and services to increase its economic productivity, the economist remarked.

“Trade costs would also be much cheaper,” he affirmed.

According to the result of a study by the Asian Development Bank, the implementation of the AEC would result in a net increase of 14 million jobs till 2025 in the ASEAN region, including in Indonesia, he said.